The broader parameters of Composite Working Capital Term Loan to manufacturing and service-oriented units under MSME up to a total project cost of ₹ 100.00 lakh.

Objective

To provide financial assistance for meeting the term loan and optimum working capital loan requirement for the first year of operation under a single scheme.

Eligibility

1. All manufacturing and service-oriented units registered with concerned District Industries Centers and their concerned respective departments.
2. Individuals, firms, partnership firms, and companies.
3. All new and existing units undertaking substantial expansion through modernization, renovation, or increase in capacity, either in the same line of activity or by taking up an additional line of activity as classified above.

Exclusions

1. Acquisition of second-hand equipment or machinery.
2. In house fabrication of equipment or machinery.

Purpose

Capital investment requirement and working capital requirement.

Margin Money

Minimum 25% .

Extent of Loan

Seventy five percent of fixed capital investment and optimum working capital requirement for the first year of operation. The working capital so sanctioned shall be utilized within one year from the date of commencement of production or commencement of services. The amount of working capital sanctioned shall be transferred to the account of the entrepreneur maintained with any bank on escrow basis. All transactions relating to running of the operation shall be maintained through this account only.

Rate of Interest

The rate of interest will be charged by the Corporation equal to the State Bank of India Marginal Cost of Fund Base Lending Rate (MCLR) for 1 year tenor as revised from time to time for all lending cases.

Security

As per the provisions of the Term Lending Policy of the Corporation.

Debt Equity Ratio

3:1.

Repayment

The loan shall be repayable in a period ranging from 3 years to 7 years, including a moratorium ranging from 6 months to 24 months, depending upon the implementation of the project.

Application Fees

The Corporation shall charge an application fee of ₹1000/- plus GST as cost of application which shall be adjustable against the processing fee to avoid non serious applicants. The application fee shall have to be deposited with the Corporation against the proper receipt at the time of issue of checklist of formalities and loan application form.

Up-Front Fee

No upfront fee shall be charged for Term loans up to ₹25.00lakh. Term loans beyond ₹25.00lakh & up to ₹100.00lakhs shall attract upfront fee @ 0.375% of the Term loan sanctioned plus GST; Term loans beyond ₹100.00lac shall attract an upfront fee of 0.75% of the term loan sanctioned plus GST. The upfront fee paid shall be non-refundable.

Processing Fees

The Corporation shall charge processing fee as per the structure given here under:

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Documentation

Standard documentation as per the norms of the Corporation.